DoH to offer consortia ‘stonking great deals’

A massive £1.5bn programme to bundle together six major hospital schemes into two or three privately financed framework contracts is to be announced next month at a Department of Health (DoH) conference in London.

Peter Coates, head of the DoH's private finance and investment unit, will use the conference as a platform to launch this new form of PFI, which is aimed at speeding up the government's hospital building programme by radically reducing the procurement and construction processes for major hospitals.

In the same month the DoH will advertise in the OJEC for advisors to guide the chosen trusts through this novel form of PFI. This will be followed early in the new year by an advertisement for consortia interested in bidding for the pilot framework contracts.

Bidders will be chosen as framework consortia on the basis of a quality competition, based on their previous performance in the PFI field, their financial strength, the strength of their supply chain and their ability to innovate.

Once chosen they will be assigned to a framework PFI contract to build either two or three major hospitals roughly in the same geographical area. The consortia would be expected to build the hospitals concurrently with no more than a six- to nine-month lag between each one.

In an effort to speed up the process Trusts will be expected to standardise as much of the contract documentation and the construction process as possible, with as many units as possible pre-fabricated off-site.

Coates said he was confident the pilots would find favour in the private sector because "they offer stonking great contracts".

Contractors welcomed the move. One leading hospital PFI contractor told CJ: "We are very interested and have already set money aside to bid for these. It's attractive because it will be so cheap to bid. Negotiations would begin at preferred bidder stage, which will save the bidders involved typically around £3m per hospital bid."